Analysis and criticism of America's most prominent public intellectual and champion of Keynesian economics. I am part of the Austrian School of Economics, and I critique Krugman's writings from that perspective.

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Friday, February 25, 2011

No doubt, Paul Krugman makes fun of people who indulge in conspiracy theories, although it seems that he constantly comes up with wild theories of his own. Do you question "stimulus" spending on public works projects? Why, you are a racist who wants to bring back slavery.

Indeed, like a good parrot, Krugman recites the Party Line and calls it argument. So, why am I not surprised when he weaves together yet another conspiracy theory about what is happening in Wisconsin. Yes, it seems that Gov. Scott Walker is in league with Paul Bremer and everyone else who was involved with the invasion of Iraq, or maybe he is part of the world-wide cabal that wants to impose the "shock doctrine" on an unsuspecting world.

He also surmises that this whole thing is nothing more than a plot by the Koch Brothers to take over Wisconsin. Wisconsin today! Tomorrow the world!! (The only problem is that George Soros -- who really does bankroll internationalist groups that believe that what we need is One Single Bureaucracy to rule over us all -- gives more money to his "causes" in a year than the Koch Brothers have given in their lifetimes. Does Krugman get any Soros money? Inquiring minds would like to know. And, no, I don't get Koch dollars. Sorry.)

Krugman gives us the following statement, and I will point out afterward just what a howler it really is:

What’s happening in Wisconsin is, instead, a power grab — an attempt to exploit the fiscal crisis to destroy the last major counterweight to the political power of corporations and the wealthy.

First, the notion that public employee unions are a "counterweight" to unwarranted "corporate power" is a very sick joke. Keep in mind that the process which he praises consists of a cabal of politicians who are elected through the efforts of the unions of government employees and the unions themselves then imposing their will upon people who are not in that circle.

In other words, we have something akin to a soviet in which the government employees elect their paymasters. The problem is that the arrangement depends upon the people on the outside being able to pony up the cash to pay for the whole thing, and they no longer are willing and able to do so.

Krugman's academic Keynesian mind claims that this is bad because the party being fleeced consists of the Evil People Who Don't Want More Spending. Don't they know that if they just accede to having their bank accounts cleaned out, that all the spending will create new prosperity? Haven't they heard of circular logic, er, flow?

Here is the crux of the problem: government employee unions cannot cannibalize themselves. Like all parasites, they need a host, and they and Krugman are very, very upset that the current hosts are rebelling. In fact, their rebellion must be part of a plot by the Koch Brothers TO TAKE OVER THE WORLD!

So, in the end, Paul Krugman resorts to conspiracy theories. Now, while I might agree with him about backroom deals and other sorts of cronyism that can occur with privatization, does he really expect us to believe that the current socialistic arrangement is free of such things?

Krugman seems to be one of those folks who believes that union-created socialism is pure, pure, pure. Public employee unions are bravely serving as a counterweight to those evil corporations, and that these unions are the heart and soul of America's middle class. Yes, Paul Krugman really seems to believe that we can have a large and thriving "middle class" that consists of bureaucrats, and the more we expand the bureaucracy, the more we expand our wealth.

And if you are not part of this arrangement, then Krugman instructs that you sit back, let the state insert the needle, and then drain you of your blood. By so doing, you are helping to create prosperity.

Tuesday, February 22, 2011

Leave it to Paul Krugman to ratchet up the use of the non sequitur in dealing with people who might disagree with him. Here is a guy who takes a stray quote and then implies that anyone who might agree with one part agrees with everything else.

I’m currently reading Daniel Walker Howe’s What Hath God Wrought, and there’s an interesting discussion of the debate over “internal improvements.” Some southerners were opposed, for an interesting reason. Here’s Nathaniel Macon of North Carolina, in 1818:

If Congress can make canals, they can with more propriety emancipate.

I leave the elucidation of any parallels or lack thereof to modern politics as an exercise for readers.

So, we have the implication from the Nobel winner himself: Oppose the "stimulus" (which is why he is advocating more "infrastructure" spending), and you are a racist, the worst kind of racist, someone who approves of slavery.

Actually, a lot of people opposed the "internal improvements" to be funded by tax dollars because a lot of the money was wasted or ended up in the pockets of people who were less-than-honest. (But, hey, they spent the money, and that is the good thing about any kind of "stimulus.")

Monday, February 21, 2011

There are a number of college fight songs that have become memorable -- and copied -- throughout the country. There is "Cheer, Cheer, for Old Notre Dame," "Hail to the Victors" (University of Michigan), "Tiger Rag" (Clemson and LSU), and even from my old alma mater, Tennessee, the infamous "Rocky Top."

("Down the Field" was our fight song when I first came to UT in 1971, but "Rocky Top" continued to move into the picture, and now it dominates any UT football or basketball game. At least I can play it on my violin, although not easily in the key that the band uses.)

From what I can tell, Paul Krugman has decided to push "On Wisconsin" for his fight song today, and I cannot say I am surprised that he took on the cause of public employee unions. Once one takes on the viewpoint that all (or almost all) government spending is "good for the economy," then what is not to like about government unions?

At one level, this is something that was inevitable, and we have to separate the politics from the larger picture. First, Krugman is correct when he writes that this is not just about cutting spending. The Wisconsin state union leaders have agreed to engage (at least in principle) to engage in negotiation.

Second, ironically, Krugman is correct when he writes the following, but not in the way that he might think:

Why bust the unions? As I said, it has nothing to do with helping Wisconsin deal with its current fiscal crisis. Nor is it likely to help the state’s budget prospects even in the long run: contrary to what you may have heard, public-sector workers in Wisconsin and elsewhere are paid somewhat less than private-sector workers with comparable qualifications, so there’s not much room for further pay squeezes.

So it’s not about the budget; it’s about the power.

In principle, every American citizen has an equal say in our political process. In practice, of course, some of us are more equal than others. Billionaires can field armies of lobbyists; they can finance think tanks that put the desired spin on policy issues; they can funnel cash to politicians with sympathetic views (as the Koch brothers did in the case of Mr. Walker). On paper, we’re a one-person-one-vote nation; in reality, we’re more than a bit of an oligarchy, in which a handful of wealthy people dominate.

Given this reality, it’s important to have institutions that can act as counterweights to the power of big money. And unions are among the most important of these institutions.

You see, Krugman is painting false picture here, a caricature that began during the Progressive Era and continues to the present time. According to Krugman, we have the Big, Bad Oligarchs on one side and then the poor, downtrodden workers on the other.

By unionizing, these poor workers are able to have a fair say in what is happening to them, so any attempt to weaken the power of unions really is nothing more than an attempt to bring back the Bad, Old Days. There is a problem with Krugman's analysis, however, a big problem.

First, we can see what has happened to those private industries in this country that have had powerful unions, from steel to autos. The only truly competitive industries in those areas today are non-union, such as the various Japanese auto firms that have built facilities in this country.

Now, Krugman would have you to believe that the workers at the various Nissan, Toyota, and BMW plants here are starving, working for mere pennies because they are not organized. Tell that to the employees who are doing just fine. Furthermore, they have jobs, as they have not forced their employers out of business, as has the UAW, which helped drive General Motors into bankruptcy, with American taxpayers being the ones now propping up this bankrupt monstrosity.

Second, we are dealing with another animal, that being government unions. There is a huge difference that Krugman fails to point out, and that is that public employee unions are allied with politicians (mostly Democrats), creating what essentially is a soviet in which the government employees provide enough clout to make sure that their chosen paymasters are elected.

The only problem for them is that the unions cannot extract good pay and benefits from themselves, so they have to go after the people who actually produce something in the real economy. What we have is an arrangement in which the unions elect the politicians who then strip others who are not part of the arrangement of their possessions to give to the unions.

This arrangement works as long as those being fleeced are able to do so and don't gain enough political power themselves to break up this soviet at the ballot box. However, this past year, despite record spending from labor unions to prop up the Democrats, they lost big in the elections and now are taking their big stand.

With the Obama administration taking an active role in organizing and supporting the protests, we can see where lines are being drawn. But there is even more, something more insidious that Krugman ignores but that I cannot and will not ignore.

The Obama administration has aggressively prosecuted and imprisoned doctors whom prosecutors claim write prescriptions that "have no medical purpose." However, at the rallies at the Wisconsin Capitol, doctors (yes, real-live M.D.s) have been handing out fake "sick" excuses to teachers in order to make their unauthorized absences be made to look as though they were away from work for a legitimate reason.

This, people, is fraud, and literally a federal crime. So, we have doctors on camera committing felonies -- and that is what they are are -- to be seen by federal authorities, and I will bet that nothing -- nothing -- will be done. In other words, Obama and his supporters (including Krugman, of course) will support felonious behavior for political reasons.

Krugman may claim that these are poor, downtrodden workers trying to stand up against the Oligarchs, but in reality, what we have been seeing are people who are able to use coercion in order to create pay and benefits for themselves that are not available to others -- the others who have to pay for these arrangements.

Moreover, many public employees have real power over the rest of us, and anyone who has dealt with unionized state and federal bureaucrats can attest to the abuse that they heap on others, and the fact that they are not accountable for that abuse. Let us be honest here, people. Paul Krugman is endorsing what in effect has been a gravy train for those people privileged to be tied to the politicians who have wielded power.

Now that the arrangements are different, the same "public servants" who enjoy pushing others around now are trying to tell us that they are nothing more than poor, oppressed workers toiling for pennies a day. And the fact that Krugman is willing to shill for this tells us a lot about the guy.

Friday, February 18, 2011

Once upon a time, I thought Paul Krugman was at least a semi-serious economist, as opposed to being just another political operative. (The difference is that I actually read Krugman's stuff, in part because of this blog and also in part because I do hope -- against hope, I'm afraid -- that he will give some of the economic wisdom that he used to give. No, I don't read anything on the Wall Street Journal editorial page by either Karl Rove or Peggy Noonan, as pure political operative material is not worth the time spent reading it.)

What would real action on health look like? Well, it might include things like giving an independent commission the power to ensure that Medicare only pays for procedures with real medical value; rewarding health care providers for delivering quality care rather than simply paying a fixed sum for every procedure; limiting the tax deductibility of private insurance plans; and so on.

And what do these things have in common? They’re all in last year’s health reform bill.

That’s why I say that Mr. Obama gets too little credit. He has done more to rein in long-run deficits than any previous president. And if his opponents were serious about those deficits, they’d be backing his actions and calling for more; instead, they’ve been screaming about death panels.

Yes, talk to people in the healthcare business who actually have to deal with the new law and all of its new regulations. Talk to people who have to fork out huge amounts of money to comply with these new rules, the restrictions on care, and the like.

This is "cost-cutting" in its most bureaucratic and Orwellian sense. One does not and CANNOT cut "costs" by forcing people to bear new costs. (Don't forget that Krugman himself used "death panels" in a positive way on national television, and he sees governmental denial of care as a legitimate tool for "cost-cutting.")

The fundamental concept in economics is opportunity cost. The Keynesian notion that government can simply create money to bring about new spending and thus reclaim "idle resources" is one way that Keynesians like Krugman like to claim that they can create the "free lunch." (Don't forget that Krugman himself makes that very claim in his Depression Economics book.)

So now we have Krugman claiming that forcing up real costs and passing laws somehow can circumvent the very real and immutable laws of economics. It's official; he no longer is an economist; he is a political operative, and maybe a comedian. Maybe both.

Monday, February 14, 2011

Paul Krugman must feel at times as though he is Horatio at the Bridge. He openly campaigned for Democrats last fall only to see the House fall to Republicans and for the Democrats to see their once almost insurmountable Senate majority fall apart. And now, the Republicans are calling for budget cuts and Krugman once again dons his battle gear.

Now, I absolutely agree with him that the military budget should not be sacrosanct, and most likely I would want more cut out of the Budget to Preserve the Empire than would he. (After all, Keynesians believe that military spending also serves as an economic "stimulus," even if they don't like what it accomplishes.) Any Republican who believes that the current level of military spending and military interventions overseas is sustainable is not someone who is willing to listen to reason.

However, Krugman does not seem to be particularly exorcised about the lack of Republican desire to cut military spending. Instead, he decides that a poll by the Pew Research Center really should be the centerpoint of economic policy. He writes:

...Americans were asked whether they favored higher or lower spending in a variety of areas. It turns out that they want more, not less, spending on most things, including education and Medicare. They’re evenly divided about spending on aid to the unemployed and — surprise — defense.

The only thing they clearly want to cut is foreign aid, which most Americans believe, wrongly, accounts for a large share of the federal budget.

Pew also asked people how they would like to see states close their budget deficits. Do they favor cuts in either education or health care, the main expenses states face? No. Do they favor tax increases? No. The only deficit-reduction measure with significant support was cuts in public-employee pensions — and even there the public was evenly divided.

The moral is clear. Republicans don’t have a mandate to cut spending; they have a mandate to repeal the laws of arithmetic.

In other words, since no one really wants to stop spending, let's just pretend that we have lots and lots of money, or that we can increase the national debt or just get the Fed to give us QE3, QE4, and QE5, which is the Going-Out-Of-Business Sale. In the meantime, Krugman really wants us to think that unless we have a vast welfare state, somehow our economy and our society will disappear:

The answer, once you think about it, is obvious: sacrifice the future. Focus the cuts on programs whose benefits aren’t immediate; basically, eat America’s seed corn. There will be a huge price to pay, eventually — but for now, you can keep the base happy.

Yet, if anyone has called for the eating of the economy's seed corn, it has been Paul Krugman. Because, in his view, capital simply "happens," then we don't have to worry about capital development, given that if we spend lots of money, capital magically appears.

To Paul Krugman, there is no difference between real wealth and the printing of money. As he wrote in The Return of Depression Economics, all it takes is for the government to end the downturn is just to print money. There is, he claims, a "free lunch" out there. What he does not say is that these are the very policies that destroy our real seed corn, our capital base.

Saturday, February 12, 2011

As I pointed out in a recent post, Paul Krugman that anyone who might disagree with the Theology of Algore really does not know science and should not be permitted to be on a college faculty:

It’s particularly troubling to apply some test of equal representation when you’re looking at academics who do research on the very subjects that define the political divide. Biologists, physicists, and chemists are all predominantly liberal; does this reflect discrimination, or the tendency of people who actually know science to reject a political tendency that denies climate change and is broadly hostile to the theory of evolution. (Emphasis mine)

Well, it turns out that some people who actually know science have found out that one of the claims made by the people who meet Krugman's approval simply is not true. According to some U.S. scientists (who almost surely will be ostracized for their heresy), a study of weather patterns for more than a century have dispelled that the weather has become more extreme:

The Twentieth Century Reanalysis Project is the latest attempt to find out, using super-computers to generate a dataset of global atmospheric circulation from 1871 to the present.

As it happens, the project's initial findings, published last month, show no evidence of an intensifying weather trend. "In the climate models, the extremes get more extreme as we move into a doubled CO2 world in 100 years," atmospheric scientist Gilbert Compo, one of the researchers on the project, tells me from his office at the University of Colorado, Boulder. "So we were surprised that none of the three major indices of climate variability that we used show a trend of increased circulation going back to 1871."

In other words, researchers have yet to find evidence of more-extreme weather patterns over the period, contrary to what the models predict. "There's no data-driven answer yet to the question of how human activity has affected extreme weather," adds Roger Pielke Jr., another University of Colorado climate researcher.

A decade ago, British scientists were claiming that snow was to be a thing of the past in Great Britain, and the authorities planned accordingly. Thus, snowfalls that not long ago would have been mere bumps in the way have become major problems, as the government has not had the equipment or the de-icing material needed to get rid of the snow.

Mainstream economists -- including Krugman -- pretty much hold to Milton Friedman's contention (from the paper "The Methodology of Positive Economics") that the gold standard for good theory is its ability to predict events or actions. In fact, Austrian Economists are vilified (see the recent attacks on Tom DiLorenzo) for holding to deductive logic as a central methodology instead of the Friedmanite view.

If Krugman is to be consistent in his thinking, then climate modeling (or climate modeling that is acceptable to Krugman and the Environmental Protection Agency) holds that an increase in carbon dioxide will increase warming, since the gas is known to hold heat. Furthermore, this model should an effective predictor of future weather patters, given that the Algoreans hold that with the inevitable warming comes other weather-related patterns. However, the models have not predicted well, despite Algore's claim that both no snow and lots of snow both are predicated by global warming. Still, the government of this country as well as other governments are using these models to lay down all sorts of economic restrictions, not to mention outlays of vast subsidies to produce "green energy" that economically speaking is an attempt to turn back the clock (something that is supposed to be anathema to people like Krugman).

We shall see if Krugman attacks these scientists as he has others, or if he simply will ignore their inconvenient studies. Most likely, it will be the latter. Out of sight, out of mind.

Friday, February 11, 2011

In an interview many years ago, Victor Navasky, the former editor of The Nation, described the New York Post as an entity that would "kneecap" anyone it did not like, and he did a "rat-a-tat-tat" imitation with his hands. (Not that Navasky and The Nation ever would do such a thing themselves.)

Economists at one time did not publicly kneecap each other. They hardly were (or are) angels behind the scenes, and I have been witness to some real ugliness that has transpired in economics departments, and ideology really had little or nothing to do with the infighting.

Over the years, I have been privileged to have met economists who won Nobel prizes and read their material. Some were forceful in what they wrote, and others were not, but even in their popular press columns, they never launched outright personal attacks on other economists, and when they mentioned others, they dealt with their arguments as they understood them.

I guess that Paul Krugman represents a new era in how Nobel-winning economists present themselves in public, and his column on Rep. Ron Paul's hearing on the Federal Reserve System once again crosses that line of civility and decency. (Perhaps it is better to argue that Krugman long ago crossed the line and decided just to stay there, and maybe build a mansion.)

It is perhaps ironic that Rep. William Lacy Clay, a congressman from St. Louis, launched the personal attacks (of which Krugman clearly approves) on Dr. Thomas DiLorenzo by claiming that Austrian Economics is "unscientific" because it relies upon deductive logic. As anyone who has taken a logic class knows, the ad homimen, appeal to authority, and the like fall into the category of "informal fallacies," yet, Krugman obviously likes to employ them. Clay also relied heavily upon such fallacies in his "proof" that Dr. DiLorenzo was a fraud.

Now, I always have learned that if one wishes to attack the position of another person, one first should do some fact-checking. First, Krugman's comments:

One of the hearings was called by Representative Ron Paul, a harsh critic of the Federal Reserve, who now has an oversight role over the very institution he wants abolished in favor of a return to the gold standard. Mr. Paul’s subcommittee called three witnesses, one of whom was an odd choice: Thomas DiLorenzo, a professor at Loyola University and a senior fellow at the Ludwig von Mises Institute.

What was odd about that choice? Well, Mr. DiLorenzo hasn’t actually written much about monetary policy, although he has described Fed policy — not just recently, but since the 1960s — as “legalized counterfeiting operations.” His main claim to fame, instead, is as a critic of Lincoln — he’s the author of “Lincoln Unmasked: What You’re Not Supposed to Know About Dishonest Abe” — and as a modern-day secessionist.

No, really: calls for secession run through many of Mr. DiLorenzo’s writings — for example, in his declaration that “healthcare freedom” won’t be restored until “some states begin seceding from the new American fascialistic state.” Raise the rebel flag! (Emphasis mine)

The junior high schoolish smart aleck Paul Krugman, who writes for that well-known leftist tabloid the New York Times, wisecracks about the Ron Paul Fed hearings in his recent column where he says that I was writing about the Fed as “a legalized counterfeiting operation” as far back as the 1960s. That’s unlikely since the very first thing that I ever wrote that was published was an article for the peer-reviewed Southern Economic Journal in 1980, shortly after I finished graduate school. He must have me confused with Ludwig von Mises or Murray Rothbard. I guess all Austrians look alike to some people.

Now, why does Krugman go rabid at any criticism of Abraham Lincoln? He explains:

He (Lincoln) was, after all, the first president to institute an income tax. And he was also the first president to issue a paper currency — the “greenback” — that wasn’t backed by gold or silver.

Yes, Lincoln was a "stimulus" sort of guy, someone who liked to print money. However, if one reads through the Krugman columns, one finds that anyone critical of such an action is to be labeled...well, whatever Krugman wants to call him. A racist? Yes. An ignoramus? Yes.

So, Paul Krugman is becoming unleashed. Disagree with him on monetary policy, global warming, the current inflation situation, taxes, and whatever else and you are not simply wrong. No, you oppose all these things because you are evil. You want people to lose their jobs and be unemployed and poor forever. There is no other explanation.

This is not likely to happen in the United States, which at the moment seems hell-bent on descending into the abyss of socialism. Once some states begin seceding from the new American fascialistic state, however, there will be opportunities to restore healthcare freedom within them.

I presume that Amity Shlaes is already working on her Lincoln assessment, The Even More Forgotten Man.

First, Tom DiLorenzo, who wrote the article that so offended Krugman, DOES make clear his use of "fascialism," writing:

Some time ago I invented the phrase "fascialism" to describe the American system of political economy. Fascialism means an economy is part fascist, part socialist. Economic fascism has nothing to do with dictatorship, militarism, or bizarre racial theories. Fascism is a brand of socialism that was the economic system of Germany and Italy in the early 20th century. It was characterized by private enterprise, but private enterprise that was comprehensively regulated and regimented by the state, ostensibly "in the public interest" (as arbitrarily defined by the state).

Socialism started out meaning government ownership of the means of production, but it came to mean egalitarianism promoted by "progressive" taxation and the institutions of the welfare state, as F.A. Hayek stated in the preface to the 1976 edition of The Road to Serfdom. The problems of the American healthcare system are caused entirely by the fact that the government subjects the system to massive interventions, some of which are fascist in nature, while others are socialist.

Second, what is Krugman really trying to say? He is trying to go in the backdoor to smear Rep. Paul with the following syllogism:

Therefore, Ron Paul is a racist and anything he says about the Fed's behavior should be ignored.

Don't kid yourselves about what Krugman is doing. The guy has smeared Ron Paul in the past and now that Rep. Paul is taking aim at the Fed -- something that is in his right to do -- Krugman is going to unleash all barrels on him. And, I am sure that his employer, the NY Slimes, will follow suit.

He goes on to describe how there is self-selection and the like in the different areas of work, and how that differs from racial discrimination. To a point, that is true. There is self-selection, and being a faculty member at a university where the political and social attitudes of the faculty as a whole pretty much fit the caricature one might have of higher education, I can attest to what Krugman is saying.

However, there is much, much more that Krugman is not saying, or pretending does not exist. First, the area of bias does apply in self-selection, but sometimes in a different way than what Krugman claims. Take the field of labor economics, for example.

It used to be that a lot of people took a field in labor while in graduate school, but today, that division is dominated by women and minorities. Why? Because the issue often under discussion is discrimination on behalf of race, sexual orientation, and sex, and people who go into the field are motivated such discussions.

Over time, as more and more women and minorities go into labor economics, that field becomes dominated by them. When economics departments have job openings, they always are under pressure to hire women and minorities, so labor becomes an easy way to meet the affirmative action goals. Thus, we see how the pattern grows, until one can expect almost any department to have its labor "experts" being women or minorities, or both.

This is not due to any nefarious plot, but rather is a rational approach taken by all parties. Likewise, over time we see the same thing happening in the area of English. Once upon a time, English departments had both liberals and conservatives, but through the years, people who are politically liberal have come to dominate, push out the older conservatives, and then make it clear that they will hire only people who agree with them.

We share space with the university's political science department, and everyone in the department is on the left and, of course, always votes Democratic. I happen to like most of them and get along with them, and at times do things socially with them, so while there might be political disagreements, they tend not to bleed into the area of friendship.

Furthermore, while people at Frostburg know I am politically libertarian and a Christian, nonetheless they had no objection to my heading the university's Promotions/Tenure Subcommittee, and in our discussions of applicants, political views simply are regarded as irrelevant, since we look at the performance and achievement records, not what someone thinks. (However, I did not publicize my appearance on Judge Andrew Napolitano's show in order to avoid any possibility of retaliation by disgruntled faculty members or administrators who foam at the mouth when they hear the word "Fox.")

This kind of tolerance is not always the norm, however. My involvement in the Duke University lacrosse case showed me that at Duke, at least, ideology matters in many ways. Students told me that many classes they took were little more than sessions of political harangues by hard-left profs, and the way that the hard left was able to dominate the campus discussion during that case tells me a lot about the place.

People like Krugman don't seem to mind what happened at Duke. The New York Times played an active role in trying to keep Mike Nifong's case alive, even when the evidence pointed the other way. The newspaper that trumpets how DNA has freed wrongly-convicted minorities suddenly decided that in the Duke case, DNA really did not matter.

So, while Krugman is partially correct, it never occurs to him that self-selection may also apply in the workplace to both race and sex, along with other factors. To do so would upset his view of the world.

Of course, Krugman cannot write a post without smearing someone who might agree with him and his own ideology. He writes:

It’s particularly troubling to apply some test of equal representation when you’re looking at academics who do research on the very subjects that define the political divide. Biologists, physicists, and chemists are all predominantly liberal; does this reflect discrimination, or the tendency of people who actually know science to reject a political tendency that denies climate change and is broadly hostile to the theory of evolution?

Interestingly, it is Krugman who denies historical climate change, for he still insists upon the discredited "hockey stick" that was created in order to conveniently do away with the well-documented Medieval Warm Period and the Little Ice Age. You see, Krugman decides that it is OK to deny science when the truth is inconvenient. (By the way, the last warming notion on the graph came from the very people who tried at first to deny that there even was a Medieval Warm Period or Little Ice Age.)

Monday, February 7, 2011

In my earlier post today, I take issue with Krugman's "Global Warming Explains It" logic. However, I have another question: If Global Warming is the cause of food prices going up, then why are commodity prices rising, too?

Krugman's standard answer is that economic activity elsewhere is driving up the prices of oil and various metals. In other words, because Krugman supports the Fed's policy of throwing dollars everywhere, he is never going to admit that maybe, just maybe, throwing more and more dollars around the world might have an impact on commodity prices.

Of course, if you say that, then you are just another evil right-winger.

Sunday, February 6, 2011

I notice that Paul Krugman KNOWS why food prices are rising. Why, it's Global Warming! Keep in mind that the Fed has been throwing new money all around the globe, and commodity prices tend to be much more sensitive to things like inflation, but Krugman knows better.

What’s behind the surge in food prices? The usual suspects have made the usual claims — it’s all about the Fed, or it’s all about speculators. But I’ve been looking at the USDA World supply and demand estimates, and what stands out from the data is mainly that we’ve had a huge global harvest failure.

Notice that Krugman does not even mention the fact that 40 percent of the nation's corn crop goes to produce ethanol, the inferior fuel that government forces us to put into our cars. But why the crop failures? Krugman has the answer:

Why is production down? Most of the decline in world wheat production, and about half of the total decline in grain production, has taken place in the former Soviet Union — mainly Russia, Ukraine, and Kazakhstan. And we know what that’s about: an incredible, unprecedented heat wave.

Obligatory disclaimer: no one event can be definitively assigned to climate change, just as you can’t necessarily claim that any one of the fender-benders taking place right now in central New Jersey was caused by the sheet of black ice currently coating our roads. But it sure looks like climate change is a major culprit. And it’s not just the FSU: extreme weather elsewhere, which again is the sort of thing you should expect from climate change, has played a role in bad harvest around the world.

Back to the economics: if you want to know why we’re having a spike in food prices, the data suggest that the key cause is terrible weather leading to bad harvests, especially in the former Soviet Union.

One of the big ironies here is that during the era of communism, the U.S.S.R. blamed bad weather every year for crop failures. It looks as though Krugman is trying to pick up where Khrushchev, Brezhnev, and Gorby left off.

Krugman picks up the same theme in his Monday column, continuing his theme that the Evil Right Wingers are the Source of All Evil. First, he excoriates anyone who might thing that printing lots of dollars might have an effect upon commodity prices:

So what’s behind the price spike? American right-wingers (and the Chinese) blame easy-money policies at the Federal Reserve, with at least one commentator declaring that there is “blood on Bernanke’s hands.” Meanwhile, President Nicolas Sarkozy of France blames speculators, accusing them of “extortion and pillaging.”

Like Krugman's predecessors who blamed bad weather for permanent bad harvests in the U.S.S.R. (because, after all, socialism BY DEFINITION cannot result in anything but freedom and plenty), Krugman tries to use the current events as a way to encourage the imposition of draconian government policies, this time to prevent Global Warming.

I hate to tell Krugman this, but he is not an expert on the weather. A Nobel does not give one Ultimate Wisdom, no matter what he and his friends at Princeton might think. In fact, Krugman might want to put on his economists' hat (you know, the one the emphasizes opportunity cost, something he ignores, as it doesn't fit his program of Inflation First) and ask what would happen not only of "cap and trade" were imposed as severely as the Princeton faculty is demanding, but also the effects of "food for fuel" around the world.

No, Krugman ignores the obvious and then demands that the bad harvests be used as a hook to impose government policies that will result in even worst harvests and real-live starvation. In other words, real economic analysis is not acceptable, not when one can worship the statue of Algore.

About Me

I teach economics at Frostburg State University in Frostburg, Maryland. We are located on the Allegheny Plateau, and we have cool summers and tough winters.
I am the single father of five children, four of them adopted from overseas and I have two grandchildren. My family and I are members of Faith Presbyterian Church (PCA).